Included inside, my YES on Prop 56 plea to Californians, even if they don't want higher taxes.
Yesterday, I was hunting through some references looking for income tax schedules for each state. In a couple publications I found charts that listed things like the top tax rates, but they were entirely inadequate. I found one chart that listed the top tax rate of all the states (the top entries looked a little like this):
State | Top Rate |
Montana | 11.0% |
Vermont | 9.5% |
California | 9.3% |
Oregon | 9.0% |
Iowa | 8.98% |
D.C. | 8.7% |
Maine | 8.5% |
North Carolina | 8.25% |
Hawaii | 8.25% |
New Mexico | 8.2% |
Wow. You would think that Montana and Vermont would have the worst tax burden in the country. However, while the marginal rate is very important, the level at which it applies is equally as important. California's 9.3 rate wouldn't feel nearly as painful at $100,000 than at $38,291. Let's revise the table to include the amount at which the top rate applies above, and move the ranking around a little to have the heavier tax burders on top and lighter ones on the bottom (by my sujective valuation, of course, so don't expect something perfect):
State | Top Rate | Reached At |
Oregon | 9.0% | $6,250 |
California | 9.3% | $38,291 |
Maine | 8.5% | $16,700 |
D.C. | 8.7% | $40,000 |
Hawaii | 8.25% | $40,000 |
New Mexico | 8.2% | $65,000 |
Montana | 11.0% | $75,400 |
Iowa | 8.98% | $54,495 |
North Carolina | 8.25% | $120,000 |
Vermont | 9.5% | $307,050 |
Vermont's tax burden no longer seems as onerous, and California and Oregon's look a lot heavier. Considering Oregon's bottom bracket is 5% at $2,500, it makes you wonder why they even bother with a graduated system at all. (Well, a flat 9% would be the highest flat rate in the country, with Massachusetts next at 5.3%.) Now, I'll fill out the rest of states, but I have a crazy idea. Let's put the unemployment rate next to each state too (in red are those above the national average).
Read More